FMA: Tell us what you need

Chief executive Rob Everett said it was in close contact with market participants to help understand the pressures they were facing, how they were coping and how they were serving the needs of customers.

He said it was an uncertain time for KiwiSaver members and other investors.

“At this point, we have not found any inappropriate behaviour by KiwiSaver providers and many KiwiSaver members are taking heed of the advice to stick with their long-term investment strategy.

“However, many providers are reporting significantly increased switching activity – mostly from growth or high-growth funds into conservative funds. The FMA urges KiwiSaver investors to consider carefully before switching funds, as they will, on occasion, see major ups and downs in balances.

“Recognising that some people might need the money immediately for a first home, switching funds during market turbulence forces the sale of investments at lower prices and gives up the prospect of gains when those investments start to recover.

“KiwiSaver providers should be providing general (class) advice to members at this time.”

The FMA has also published warnings to consumers about investment scams exploiting market conditions and uncertainty due to the Covid-19 pandemic.

A number of other agencies and overseas regulators were concerned that the anxieties caused by the virus pandemic and related market disruption might make some investors particularly vulnerable to scam artists.